Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989 - SECT 49

49. Section 275 of the Principal Act is repealed and the following sections
are substituted: Transfer of taxable contributions

"275. (1) Subject to this section, the trustee of a complying superannuation
fund or complying ADF (in this section called the 'transferor') may, with the
consent of a particular life assurance company, registered organization or PST
(in this section called the 'transferee'), give a notice to the Commissioner
in relation to a year of income (in this section called the 'transferor's year
of income) stating that this section applies to the transferor and transferee
in relation to an amount specified in the notice.

"(2) Subject to subsection (3), the effect of the notice is that the amount to
which the notice relates shall be taken, for the purposes of this Act:

   (a)  to be included in the assessable income of the transferee of the year
        of income of the transferee in which the end of the transferor's year
        of income occurs; and

   (b)  not to be included in the assessable income of the transferor of the
        transferor's year of income.

"(3) The total amount excluded from the transferor's assessable income of a
year of income under this section shall not exceed the total of the taxable
contributions paid to the transferor in that year of income.

"(4) The amount specified in the notice shall not exceed the amount calculated
using the formula:
Highest equity value
--------------------
Tax rate where:
Highest equity value is the highest value, at any time during the transferor's
year of income, of the transferor's investment in the transferee;
Tax rate is the rate of tax imposed on the standard component of the taxable
income of the transferor of the transferor's year of income.

"(5) A reference in subsection (4) to the transferor's investment in the
transferee is a reference to investments consisting of:

   (a)  if the transferee is a PST - units in the PST; or

   (b)  if the transferee is a life assurance company or registered
        organization:

        (i)    life assurance policies issued by the transferee; or

        (ii)   an interest in an interposed trust whose assets consist wholly
               of life assurance policies issued by the transferee.

"(6) The transferor is allowed to give only one notice in relation to a year
of income in relation to a particular transferee.

"(7) The notice:

   (a)  shall be in the approved form;

   (b)  shall be given in the approved manner;

   (c)  shall be given on or before the date of lodgment of the return of
        income of the transferor for the transferor's year of income; and

   (d)  is irrevocable. Pre-1 July 88 funding credit balance

"275A. (1) For the purposes of this Division, the pre-1 July 88 funding credit
balance of a fund at a particular time in a year of income is the amount (if
any) by which the total of the pre-1 July 88 funding credits of the fund
arising in the year of income and before that time exceeds the total of the
pre-1 July 88 funding debits arising in the year of income and before that
time.

"(2) If the Insurance and Superannuation Commissioner has given a notice under
subsection 15D (2) of the OSS Act granting the trustee of a fund a pre-1 July
88 funding credit, there shall be taken to have arisen, at the beginning of
the year of income in which 1 July 1988 occurs, a pre-1 July 88 funding credit
of the fund as specified in the notice.

"(3) If the trustee of a fund makes an election under subsection 275B (1) for
a year of income in relation to a particular amount, there shall be taken to
have arisen, immediately before the end of the year of income, a pre-1 July 88
funding debit equal to that amount.

"(4) If the Insurance and Superannuation Commissioner has given a notice under
subsection 15D (4) of the OSS Act in relation to an event that has occurred
(within the meaning of that subsection) in relation to a fund, there shall be
taken to have arisen, at the end of the second-last day of the year of income
in which the event occurred, a pre-1 July 88 funding debit equal to the pre-1
July 88 funding credit balance (if any) of the fund immediately before the end
of that day.

"(5) If the Insurance and Superannuation Commissioner has given a notice under
subsection 15D (6) of the OSS Act granting the trustee of a fund a pre-1 July
88 funding debit, in relation to an event that has occurred (within the
meaning of that subsection) in relation to a fund, there shall be taken to
have arisen, immediately after the beginning of the second-last day of the
year of income in which the event occurred, a pre-1 July 88 funding debit
equal to the amount specified in the notice.

"(6) If the Insurance and Superannuation Commissioner gives a notice under
regulations made for the purposes of subsection 15D (7) of the OSS Act
approving the transfer of a pre-1 July 88 funding credit of a fund (in this
subsection called the 'transferor') to another fund (in this subsection called
the 'transferee'):

   (a)  there shall be taken to have arisen, immediately after the beginning
        of the second-last day of the year of income in which the time that
        the transfer has effect under those regulation occurs, a pre-1 July 88
        funding debit of the transferor equal to the amount transferred; and

   (b)  there shall be taken to have arisen, at the beginning of the
        secondlast day of the year of income in which the time the transfer
        has effect under those regulations occurs, a pre-1 July 88 funding
        credit of the transferee equal to the amount transferred.

"(7) If a fund has a pre-1 July 88 funding credit balance at the end of a year
of income, there shall be taken to have arisen, at the beginning of the next
year of income, a pre-1 July 88 funding credit equal to the amount calculated
by multiplying that pre-1 July 88 credit balance by the indexation factor
calculated under subsection 159SG (2) for the next year of income. Application
of pre-1 July 88 funding credits

"275B. (1) If there is a pre-1 July 88 funding credit balance of a complying
superannuation fund as at the beginning of the last day of a year of income,
the trustee of the fund may elect that this subsection shall apply for the
year of income in relation to a specified amount of taxable contributions made
to the fund.

"(2) The amount specified in the election shall not exceed whichever of the
following is the lesser:

   (a)  the pre-1 July 88 funding credit balance of the fund as at the
        beginning of the last day of the year of income;

   (b)  the total of the amounts covered by subparagraph 274 (1) (a) (i), (ii)
        or (iii) paid to the fund in the year of income, reduced by amounts
        covered by subsection 274 (7) and by the amount calculated using the
        formula:
R x (Taxed ETP components + Total pension components) where:
R is the number determined in accordance with the following table:
TABLE OF VALUES OF R
------------------------------------------------------------------------ Year
of income                                  Value of R
------------------------------------------------------------------------
1988-89 . . . . . . . . . . . . . . . . . . .      0.2

        1989-90 . . . . . . . . . . . . . . . . . . .      0.4

        1990-91 . . . . . . . . . . . . . . . . . . .      0.6

        1991-92 . . . . . . . . . . . . . . . . . . .      0.8

        1992-93 or later  . . . . . . . . . . . . . .      1.0
------------------------------------------------------------------------ Taxed
ETP components is the aggregate of the taxed elements of post-June 83
components of ETPs paid out of the fund in the year of income;
Total pension components is the aggregate of the pension components calculated
under subsection (3) for each rebatable superannuation pension that is payable
from the fund and has a first payment date in the year of income.

"(3) The pension component for a rebatable superannuation pension is
calculated using the formula:
Post-June 83 days
(Notional purchase price - UPP) x -----------------
Accrual days where:
Notional purchase price is the notional purchase price of the pension for the
purposes of Subdivision AAB of Division 17 of Part III;
UPP is the amount that applies to the pension under paragraph (b) of the
definition of 'undeducted purchase price' in subsection 27A (1);
Post-June 83 days is the number of days after 30 June 1983 in the accrual
period for the pension;
Accrual days is the number of days in the accrual period for the pension.

"(4) The assessable income of the fund of the year of income shall not include
the amount specified in the election.

"(5) An election by a trustee under subsection (1):

   (a)  shall be made by notice in writing to the Commissioner; and

   (b)  shall be lodged with the Commissioner on or before the date of
        lodgment of the return of income of the trustee for the year of income
        to which the election relates, or before such later date as the
        Commissioner allows.

"(6) In this section:
'1988-89' means the year of income commencing on 1 July 1988 and so on for
other years of income.

"(7) In this section:
'accrual period' has the same meaning as in Subdivision AAB of Division 17 of
Part III;
'first payment date' has the same meaning as in Subdivision AAB of Division 17
of Part III;
'rebatable superannuation pension' has the same meaning as in Subdivision AAB
of Division 17 of Part III.".